UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 8-K/A

CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): July 2, 2012

AMERICAN MIDSTREAM PARTNERS, LP
(Exact name of registrant as specified in its charter)

 
					
Delaware	 	001-35257	 	27-0855785	
(State or other jurisdiction
of incorporation)	 	(Commission
File Number)	 	(I.R.S. Employer
Identification No.)	
		
1614 15th Street, Suite 300
Denver, Colorado 80202	 	80202	
(Address of principal executive offices)	 	(Zip Code)	
Registrant’s telephone number, including area code: (720) 457-6060
Not applicable
(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
 
¨	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)	
 
¨	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)	
 
¨	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))	
 
¨	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))	

 

Explanatory Note
On July 2, 2012, American Midstream Partners, LP, a Delaware limited partnership (the “Partnership”) completed its acquisition of an 87.4% undivided interest in the Chatom Gas Plant and related assets located in Washington County, Alabama (“Chatom Assets”). This Amendment No. 1 amends Item 9.01 of the Current Report on Form 8-K of the Partnership filed with the Securities and Exchange Commission on July 9, 2012, to provide the financial statement information required by Item 9.01 of Form 8-K which was excluded from the initial filing in reliance on Item 9.01(a)(4) of Form 8-K.
Item 9.01 Financial Statements and Exhibits
(a) Financial Statements of Businesses Acquired
The unaudited balance sheet as of the six months ended June 30, 2012, the unaudited statements of income, statements of changes in owners’ equity and statements of cash flows for the six months ended June 30, 2012, the audited balance sheet as of December 31, 2011 and the audited statements of income, statements of changes in owners’ equity and statements of cash flows for the year ended December 31, 2011 of Chatom Assets, the related notes thereto, and report of independent registered public accounting firm related thereto with respect to audited financial statements, are filed as Exhibit 99.2 to this Current Report on Form 8-K/A and are incorporated herein by reference.
(b) Pro Forma Financial Information.
The Partnership’s unaudited pro forma condensed consolidated balance sheet as of June 30, 2012, and unaudited pro forma condensed consolidated statements of income for the six months ended June 30, 2012 and the year ended December 31, 2011 and the related notes thereto, are filed as Exhibit 99.3 to this Current Report on Form 8-K/A and are incorporated herein by reference.
(d) Exhibits.
See “Index to Exhibits” attached to this Current Report on Form 8-K/A, which is incorporated by reference herein.

SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	 		 	American Midstream Partners, LP	
				
 	 	 	 	By : 	 	American Midstream GP, LLC,	
	 		 		 	its General Partner	
				
Date: September 11, 2012	 		 	By:	 	/s/ Daniel C. Campbell	
	 		 	Name:	 	Daniel C. Campbell	
	 		 	Title:	 	Senior Vice President and Chief Financial Officer	

Exhibit Index

Exhibit
Number	  	Description	
		
23.1	  	Consent of PricewaterhouseCoopers LLP.	
		
99.1*	  	American Midstream Partners, LP press release dated July 9, 2012.	
		
99.2	  	Unaudited Balance Sheet as of the six months ended June 30, 2012, Unaudited Statements of Income, Statements of Changes in Owners’ Equity and Statements of Cash Flows for the six months ended June 30, 2012, Audited Balance Sheet as of December 31, 2011 and Audited Statements of Income, Statements of Changes in Owners’ Equity and Statements of Cash Flows for the year ended December 31, 2011 of Chatom Assets, and related notes thereto and Report of Independent Registered Public Accounting Firm related thereto with respect to audited financial statements.	
		
99.3	  	Partnership’s Unaudited Pro Forma Condensed Consolidated Balance Sheet as of June 30, 2012, Unaudited Pro Forma Condensed Consolidated Statements of Income for the six months ended June 30, 2012 and the year ended December 31, 2011 and the related notes thereto.	
 
*	Previously filed	

Exhibit 23.1
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
We hereby consent to the incorporation by reference in the Registration Statement on Form S-8 of American Midstream Partners, LP of our report dated September 11, 2012 relating to the financial statements of the Chatom Processing and Fractionation Plant, which appears in Exhibit 99.2 of American Midstream Partners, LP’s Current Report on Form 8-K/A of American Midstream dated September 11, 2012.
/s/ PricewaterhouseCoopers LLP
Denver, Colorado
September 11, 2012

Exhibit 99.2
CHATOM ASSETS
INDEX TO FINANCIAL STATEMENTS

 	  	Page	 	
		
Report of Independent Registered Public Accounting Firm	  	 	2	  	
		
Balance sheets as of June 30, 2012 (unaudited) and December 31, 2011	  	 	3	  	
		
Statements of income for the six months ended June 30, 2012 (unaudited) and for the year ended December 31, 2011	  	 	4	  	
		
Statements of changes in owners’ equity for the six months ended June 30, 2012 (unaudited) and for the year ended December 31, 2011	  	 	5	  	
		
Statements of cash flows for the six months ended June 30, 2012 (unaudited) and for the year ended December 31, 2011	  	 	6	  	
		
Notes to financial statements	  	 	7	  	
 
1

Report of Independent Registered Public Accounting Firm
To the Board of Directors of the General Partner of
American Midstream Partners, LP:
In our opinion, the accompanying balance sheet and the related statement of income, changes in owners’ equity and cash flows present fairly, in all material respects, the financial position of the Chatom processing and fractionation plant and associated gathering infrastructure (“Chatom Assets”) at December 31, 2011, and the results of its operations and its cash flows for the year then ended in conformity with accounting principles generally accepted in the United States of America. These financial statements are the responsibility of management. Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit of these statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.
/s/ PricewaterhouseCoopers LLP
Denver, Colorado
September 11, 2012
 
2

CHATOM ASSETS
BALANCE SHEETS
(in thousands)

 	  	June 30,
2012	 	  	December 31,
2011	 	
 	  	(unaudited)	 	  	 	 	
ASSETS:	  				  				
Current assets:	  				  				
Unbilled revenue	  	$	4,295	  	  	$	5,934	  	
Unbilled revenue - affiliate	  	 	145	  	  	 	70	  	
Accounts receivable	  	 	—  	  	  	 	305	  	
Other current assets	  	 	—  	  	  	 	2	  	
	  	 	 	 	  	 	 	 	
Total current assets	  	 	4,440	  	  	 	6,311	  	
Property, plant and equipment, net	  	 	4,585	  	  	 	4,551	  	
	  	 	 	 	  	 	 	 	
Total assets	  	$	9,025	  	  	$	10,862	  	
	  	 	 	 	  	 	 	 	
LIABILITIES AND OWNERS’ EQUITY:	  				  				
Current liabilities:	  				  				
Accrued gas purchases	  	$	1,535	  	  	$	2,014	  	
Accrued gas purchases - affiliate	  	 	1,915	  	  	 	2,693	  	
Accounts payable and other accrued expenses	  	 	182	  	  	 	475	  	
	  	 	 	 	  	 	 	 	
Total current liabilities	  	 	3,632	  	  	 	5,182	  	
Asset retirement obligations	  	 	411	  	  	 	396	  	
	  	 	 	 	  	 	 	 	
Total liabilities	  	 	4,043	  	  	 	5,578	  	
	  	 	 	 	  	 	 	 	
Commitments and contingencies (Note 8)	  				  				
Owners’ equity	  	 	4,982	  	  	 	5,284	  	

Total liabilities and owners’ equity	  	$	9,025	  	  	$	10,862	  	
	  	 	 	 	  	 	 	 	
See accompanying notes to the financial statements.
 
3

CHATOM ASSETS
STATEMENTS OF INCOME
(in thousands)

 	  	Six months
ended June 30,
2012	 	  	Year ended
December 31,
2011	 	
 	  	(unaudited)	 	  	 	 	
REVENUE:	  				  				
Sale of natural gas, NGL’s and condensate	  	$	35,007	  	  	$	51,441	  	
Fractionation fees - affiliates	  	 	749	  	  	 	203	  	
	  	 	 	 	  	 	 	 	
Total revenue	  	 	35,756	  	  	 	51,644	  	
OPERATING EXPENSES:	  				  				
Purchases of natural gas, NGL’s and condensate	  	 	13,264	  	  	 	16,194	  	
Purchases of natural gas, NGL’s and condensate - affiliate	  	 	15,145	  	  	 	23,245	  	
Direct operating expenses	  	 	2,734	  	  	 	5,932	  	
Selling, general and administrative expenses	  	 	896	  	  	 	1,487	  	
Depreciation and accretion expense	  	 	254	  	  	 	472	  	
	  	 	 	 	  	 	 	 	
Total operating expenses	  	 	32,293	  	  	 	47,330	  	
Net income	  	 	3,463	  	  	 	4,314	  	
	  	 	 	 	  	 	 	 	
See accompanying notes to the financial statements.
 
4

CHATOM ASSETS
STATEMENTS OF CHANGES IN
OWNERS’ EQUITY
(in thousands)

 	  	 	 	
Balance at December 31, 2010	  	$	4,674	  	
Net income	  	 	4,314	  	
Net distributions to owners	  	 	(3,704	) 	
	  	 	 	 	
Balance at December 31, 2011	  	$	5,284	  	
Net income	  	 	3,463	  	
Net distributions to owners	  	 	(3,765	) 	
	  	 	 	 	
Six months ended June 30, 2012 (unaudited)	  	$	4,982	  	
	  	 	 	 	
See accompanying notes to the financial statements.
 
5

CHATOM ASSETS
STATEMENTS OF CASH FLOWS
(in thousands)

 	  	Six months
ended June 30,
2012	 	 	Year ended
December 31,
2011	 	
 	  	(unaudited)	 	 	 	 	
Cash flows from operating activities:	  				 				
Net income	  	$	3,463	  	 	$	4,314	  	
Adjustments to reconcile net income / (loss) to net cash provided by operating activities:	  				 				
Depreciation and accretion expense	  	 	254	  	 	 	472	  	
Changes in operating assets and liabilities:	  				 				
Unbilled revenue	  	 	1,639	  	 	 	(3,695	) 	
Unbilled revenue - affiliate	  	 	(75	) 	 	 	(70	) 	
Accounts receivable	  	 	305	  	 	 	32	  	
Other current assets	  	 	2	  	 	 	4	  	
Accrued gas purchases	  	 	(479	) 	 	 	1,269	  	
Accrued gas purchases - affiliate	  	 	(778	) 	 	 	1,732	  	
Accounts payable and other accrued expenses	  	 	(267	) 	 	 	235	  	
	  	 	 	 	 	 	 	 	
Net cash provided by operating activities	  	$	4,064	  	 	$	4,293	  	
	  	 	 	 	 	 	 	 	
Cash flows from investing activities:	  				 				
Additions to property, plant and equipment	  	 	(299	) 	 	 	(589	) 	
	  	 	 	 	 	 	 	 	
Net cash flows used in investing activities	  	$	(299	) 	 	$	(589	) 	
	  	 	 	 	 	 	 	 	
Cash flows from financing activities:	  				 				
Net distributions to Parent	  	 	(3,765	) 	 	 	(3,704	) 	
	  	 	 	 	 	 	 	 	
Net cash flows used in financing activities	  	$	(3,765	) 	 	$	(3,704	) 	
	  	 	 	 	 	 	 	 	
Net increase (decrease) in cash and cash equivalents	  	 	—  	  	 	 	—  	  	
Cash and cash equivalents at beginning of period	  	 	—  	  	 	 	—  	  	
	  	 	 	 	 	 	 	 	
Cash and cash equivalents at end of period	  	$	—  	  	 	$	—  	  	
	  	 	 	 	 	 	 	 	
Non-cash activities	  				 				
Revision in asset retirement obligations	  	$	—  	  	 	$	(31	) 	
	  	 	 	 	 	 	 	 	
Increase (decrease) in accrued property, plant and equipment	  	$	(26	) 	 	$	82	  	
	  	 	 	 	 	 	 	 	
See accompanying notes to the financial statements.
 
6

Notes to the financial statements of
Chatom Assets
1. DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION
The accompanying financial statements and related notes present the financial position, results of operations, owners’ equity and cash flows of certain midstream assets acquired by American Midstream Partners, LP (the “Partnership”) from affiliates of Quantum Resources Management, LLC (“Quantum”). The Chatom processing and fractionation plant and associated gathering infrastructure, collectively known as the “Chatom Assets,” are located in Washington County, Alabama, approximately 15 miles from our Bazor Ridge processing plant in Wayne County, Mississippi, and consists of a 25 MMcf/d refrigeration processing plant, a 1,900 Bbl/d fractionation unit, a 160 long-ton per day sulfur recovery unit, and a 29-mile gas gathering system. See Note 9 – Subsequent Events , for more information.
These financial statements were prepared in connection with the Partnership’s acquisition of the Chatom Assets from Quantum and incorporate the activities and account balances of the Chatom Assets as reflected in the historical cost-basis with certain adjustments made in order to reasonably reflect substantially all of the costs of doing business. These adjustments required the use of management’s assumptions, allocations and estimates.
The accompanying financial statements and notes thereto were prepared for the purpose of complying with Securities and Exchange Commission (the “SEC”) rules and regulations, including but not limited to Regulation S-X, Article 3, General Instructions as to Financial Statements , and Staff Accounting Bulletin (“SAB”) Topic 1-B, Allocation of Expenses and Related Disclosures in Financial Statements of Subsidiaries, Divisions or Lesser Business Components of Another Entity . Certain expenses incurred by Quantum were not directly allocated to the Chatom Assets. In connection with the preparation of these financial statements, management has estimated certain operating costs, primarily general and administrative expense, in accordance with SAB Topic 1-B.
Beginning with the Partnership’s quarterly report on Form 10-Q for the quarter ending September 30, 2012, the Chatom Assets will be consolidated by the Partnership. Accordingly, these financial statements are not indicative of the actual results of operations that would have occurred if the Chatom Assets had been operated separately during the periods reported and may not be indicative of future results of operations. Transactions between the Chatom Assets and Quantum have been identified in the financial statements as transactions between affiliates. The allocations and related estimates and assumptions are more fully described in Note 2 — Summary of Significant Accounting Policies and Note 3 — Transactions with Affiliates .
These financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). The information furnished herein reflects all normal recurring adjustments that are, in the opinion of management, necessary for the fair statement of financial position as of June 30, 2012 (unaudited) and December 31, 2011 and for the results of operations, changes in owners’ equity and cash flows for the six months ended June 30, 2012 (unaudited) and for the year ended December 31, 2011.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Use of estimates
To conform to accounting principles generally accepted in the United States, management makes estimates and assumptions that affect the amounts reported in the financial statements and the notes thereto. These estimates are evaluated on an ongoing basis, utilizing historical experience and other methods considered reasonable in the particular circumstances. Although these estimates are based on management’s best available knowledge at the time, actual results may differ as they become known.
Effects on the Chatom Assets’ business, financial position and results of operations resulting from revisions to estimates will be recognized when the facts that give rise to the revision become known. Changes in facts and circumstances or discovery of new facts or circumstances may result in revised estimates and actual results may differ from these estimates.
Fair value
The fair value measurement standard defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The standard characterizes inputs used in determining fair value according to a hierarchy that prioritizes those inputs based upon the degree to which they are observable. The three levels of the fair value hierarchy are as follows:
Level 1 — unadjusted quoted prices in active markets for identical assets or liabilities;
Level 2 — inputs include quoted prices for similar assets and liabilities in active markets that are either directly or indirectly observable; and
 
7

Level 3 — inputs are unobservable and considered significant to fair value measurement.
Nonfinancial assets and liabilities initially measured at fair value include impaired long-lived assets (asset groups), initial recognition of asset retirement obligations and initial recognition of environmental obligations assumed in a third-party acquisition.
Financial instruments included in the accompanying financial statements include accounts receivable and accounts payable. The carrying value of accrued revenues, accrued gas purchases and accounts payable and other current liabilities approximates their fair value due to the short-term nature of these items. Impairment analyses for long-lived assets and initial recognition of asset retirement obligations and environmental obligations utilize Level 3 inputs.
Property, plant and equipment
Property, plant and equipment is stated at the lower of historical cost less accumulated depreciation or adjusted to fair value if impaired. All construction-related direct labor and material costs are capitalized. The cost of renewals and betterments that extend the useful life of property, plant and equipment is also capitalized. The cost of repairs, replacements and major maintenance projects that do not extend the useful life or increase the expected output of property, plant and equipment is expensed as incurred.
Depreciation is computed over the asset’s estimated useful life using the straight-line method, based on estimated useful lives and salvage values of assets. Uncertainties that may impact these estimates include, among others, changes in laws and regulations relating to environmental matters, including air and water quality, restoration and abandonment requirements, economic conditions and supply and demand in the area. When assets are placed into service, management makes estimates with respect to useful lives and salvage values that management believes are reasonable. However, subsequent events could cause a change in estimates, thereby impacting future depreciation amounts.
Management evaluates the ability to recover the carrying amount of long-lived assets and determines whether such long-lived assets have been impaired. Impairment exists when the carrying amount of an asset exceeds estimates of the undiscounted cash flows expected to result from the use and eventual disposition of the asset. When alternative courses of action to recover the carrying amount of a long-lived asset are under consideration, estimates of future undiscounted cash flows take into account possible outcomes and probabilities of their occurrence. If the carrying amount of the long-lived asset is not recoverable, based on the estimated future undiscounted cash flows, the impairment loss is measured as the excess of the asset’s carrying amount over its estimated fair value, such that the asset’s carrying amount is adjusted to its estimated fair value with an offsetting charge to impairment expense.
Fair value represents the estimated price between market participants to sell an asset in the principal or most advantageous market for the asset, based on assumptions a market participant would make. When warranted, management assesses the fair value of long-lived assets using commonly accepted techniques and may use more than one source in making such assessments. Sources used to determine fair value include, but are not limited to, recent third-party comparable sales, internally developed discounted cash flow analyses and analyses from outside advisors. Significant changes, such as changes in contract rates or terms, the condition of an asset, or management’s intent to utilize the asset, generally require management to reassess the cash flows related to long-lived assets. A reduction of carrying value of fixed assets would represent a Level 3 fair value measure. No impairment expense was recognized for the six months ended June 30, 2012, or for the year ended December 31, 2011.
Asset retirement obligations
Management recognizes a liability based on the estimated costs of retiring tangible long-lived assets. The liability is recognized at the fair value measured using discounted expected future cash outflows of the asset retirement obligation when the obligation originates, which generally is when an asset is acquired or constructed. The carrying amount of the associated asset is increased commensurate with the liability recognized. The initial recognition of asset retirement obligations represents a Level 3 fair value measure. Accretion expense is recognized over time as the discounted liability is accreted to its expected settlement value. Subsequent to the initial recognition, the liability is also adjusted for any changes in the expected value of the retirement obligation (with a corresponding adjustment t o property, plant and equipment) until the obligation is settled. If the fair value of the estimated asset retirement obligation changes, an adjustment is recorded for both the asset retirement obligation and the associated asset carrying amount. Revisions in estimated asset retirement obligations may result from changes in estimated inflation rates, discount rates, retirement costs and the estimated timing of settling asset retirement obligations.
Revenues and purchase of natural gas, NGL’s and condensate
Revenues include gathering and processing services pursuant to fee-based and Percent-of-Proceeds, or POP, agreements and the sales
 
8

of residue gas, condensate, sulfur and NGLs. Under its fee-based agreements, the Chatom Assets earn a fixed fee per unit of the rich associated natural gas gathered and recognize revenues for its services at the time such services are performed. Under its POP agreements, the Chatom Assets earns revenue on a percentage of volumes it has retained and sells into the market. Estimated proceeds from the sale of residue gas, NGLs, sulfur and condensate are recognized as revenue upon transfer of title.
The Chatom Assets accrue for the purchase of rich associated natural gas volumes at the wellhead for gathering and processing and are recorded as purchases of natural gas, NGLs and condensate at the time of delivery.
Environmental expenditures
Environmental expenditures related to conditions caused by past operations that do not generate current or future revenues are expensed. Environmental expenditures related to operations that generate current or future revenues are expensed or capitalized, as appropriate. Chatom Assets accrues for losses associated with environmental-remediation obligations when such losses are probable and can be reasonably estimated. Accruals for estimated losses from environmental-remediation obligations are recognized no later than the time of the completion of the remediation feasibility study. These accruals are adjusted as additional information becomes available or as circumstances change. Costs of future expenditures for environmental-remediation obligations are not discounted to their present value. See Note 8 — Commitments and Contingencies — Environmental obligations .
Cash
Quantum provided cash as needed to support the Chatom Assets operations and collected cash from the services provided by the Chatom Assets. Consequently, the accompanying balance sheets do not include any cash balances. See Note 3 — Transactions with Affiliates for information on Quantum centralized cash management process. Net cash paid to or received from Quantum is reflected as net contributions from or distributions to owners on the accompanying Statements of Change in Owners’ Equity and Cash Flows.
Allowance for doubtful accounts
Management analyzes its exposure to bad debts on a customer-by-customer basis for the Chatom Assets’ third-party accounts receivable and may establish credit limits for significant third-party customers. There were no amounts necessary or recorded in allowance for doubtful accounts for the Chatom Assets at June 30, 2012 or December 31, 2011.
Income taxes
The Chatom Assets and Quantum are not subject to income tax as a stand-alone entity. The income or loss of the limited liability company is passed through to the members and reported on their income tax returns.
New accounting standards
In December 2011, the FASB issued ASU No. 2011-11 Disclosures about Offsetting Assets and Liabilities . The ASU requires additional disclosures about the impact of offsetting, or netting, on a company’s financial position, and is effective for annual periods beginning on or after January 1, 2013 and interim periods within those annual periods, and retrospectively for all comparative periods presented. Under GAAP, derivative assets and liabilities can be offset under certain conditions. The ASU requires disclosures showing both gross information and net information about instruments eligible for offset in the balance sheet. Currently, the provisions of ASU 2011-11 will not have a significant impact to our financial position or results of operations.
3. TRANSACTIONS WITH AFFILIATES
Cash management
Quantum operates a cash management system whereby excess cash from most of its subsidiaries, held in separate bank accounts, is swept into a centralized account. Sales and purchases related to the Chatom Assets’ third-party transactions were received or paid in cash by Quantum within the centralized cash management system and were ultimately settled through an adjustment to owners’ equity as there is no intention to settle these intercompany balances in cash. The outstanding affiliate balances were entirely settled through an adjustment to owners’ equity in connection with the Chatom Acquisition.
Allocation of costs
The employees supporting the operations of the Chatom Assets are employees of Quantum. For the purpose of these financial statements, a portion of Quantum’s general and administrative expenses has been allocated to the Chatom Assets in the form of an implied management services fee and included in the accompanying statements of income. The management services fee represents allocable costs, including compensation, benefits, pension and postretirement costs, associated with the provision of services for or on the behalf of the Chatom Assets by Quantum related to the following: (i) various business services, including, but not limited to, payroll, accounts payable and facilities management; and (ii) various corporate services, including, but not limited to, legal,
 
9

accounting, treasury, information technology and human resources. General, administrative and management costs were allocated to the Chatom Assets based on their proportionate share of Quantum’s revenues. Management considers these allocation methodologies to be reasonable.
Affiliate transactions
Chatom Assets earned fractionation fee revenues and incurred purchases of natural gas, NGL’s and condensate, accrued or paid, to or from affiliates of Quantum. Each of these activities results in affiliate transactions.
4. CONCENTRATION OF CREDIT RISK
The Chatom Assets’ primary market areas are located in the Southeast. The Chatom Assets have a concentration of accrued revenue balances due from companies engaged in the production, trading, distribution and marketing of natural gas and NGL products. This concentration of customers may affect their overall credit risk in that the customers may be similarly affected by changes in economic, regulatory or other factors. The Chatom Assets maintain allowances for potentially uncollectible accounts receivable; however, for the six months ended June 30, 2012 and the year ended December 31, 2011, no allowances on or write-offs of accounts receivable were necessary or recorded. The summary of customers whose revenues exceed 10 percent of total revenue is as follows:

 	  	Six Months Ended
June 30, 2012	 	 	Year Ended
December 31, 2011	 	
 	  	(unaudited)	 	 	 	 	
Customer A	  	 	74.5	% 	 	 	59.9	% 	
Customer B	  	 	—  	% 	 	 	12.7	% 	
Customer C	  	 	—  	% 	 	 	10.9	% 	
Customer D	  	 	—  	% 	 	 	10.4	% 	
Other	  	 	25.5	% 	 	 	6.1	% 	
	  	 	 	 	 	 	 	 	
Total	  	 	100	% 	 	 	100	% 	
	  	 	 	 	 	 	 	 	
5. PROPERTY, PLANT AND EQUIPMENT
A summary of the historical cost of the Chatom Assets’ property, plant and equipment is as follows (in thousands, except for estimated useful life):

 	  	Estimated
useful life	 	  	June 30, 2012	 	 	December 31, 2011	 	
 	  	 	 	  	(unaudited) 	 	 	 	 	
Gathering and processing systems and related pipelines	  	 	5 to 20 years	  	  	$	6,823	  	 	$	6,550	  	
Other	  	 	3 to 5 years	  	  	 	19	  	 	 	19	  	
	  				  	 	 	 	 	 	 	 	
Total property, plant and equipment	  				  	 	6,842	  	 	 	6,569	  	
Accumulated depreciation	  				  	 	(2,257	) 	 	 	(2,018	) 	
	  				  	 	 	 	 	 	 	 	
Total net property, plant and equipment	  				  	$	4,585	  	 	$	4,551	  	
	  				  	 	 	 	 	 	 	 	
6. ACCOUNTS PAYABLE AND OTHER ACCRUED LIABILITIES
The following table provides the components of accounts payable and other accrued liabilities (in thousands):

 	  	June 30, 2012	 	  	December 31, 2011	 	
 	  	(unaudited) 	 	  	 	 	
Direct operating expenses	  	$	126	  	  	$	393	  	
Accrued capital expenditures	  	 	56	  	  	 	82	  	
	  	 	 	 	  	 	 	 	
	  	$	182	  	  	$	475	  	
	  	 	 	 	  	 	 	 	
7. ASSET RETIREMENT OBLIGATIONS
The following table provides a summary of changes in asset retirement obligations (in thousands):

 	  	Six Months Ended
June 30, 2012	 	  	Year Ended
December 31, 2011	 	
 	  	(unaudited) 	 	  	 	 	
Carrying amount of asset retirement obligations at beginning of period	  	$	396	  	  	$	339	  	
Accretion expense	  	 	15	  	  	 	26	  	
Revisions in estimates	  	 	—  	  	  	 	31	  	
	  	 	 	 	  	 	 	 	
Carrying amount of asset retirement obligations at end of period	  	$	411	  	  	$	396	  	

10

8. COMMITMENTS AND CONTINGENCIES
Environmental obligations
The Chatom Assets are subject to federal, state and local regulations regarding air and water quality, hazardous and solid waste disposal and other environmental matters. Management believes there are currently no such matters that will have a material adverse effect on the Chatom Assets’ results of operations, cash flows or financial position.
Litigation and legal proceedings
From time to time, the Chatom Assets are involved in legal, tax, regulatory and other proceedings in various forums regarding performance, contracts and other matters that arise in the ordinary course of business. Management is not aware of any such proceedings for which a final disposition could have a material adverse effect on the Chatom Assets’ results of operations, cash flows or financial position.
Lease commitments
During 2011, Quantum executed amended contracts for leased compression equipment. Rent expense was approximately $32 thousand and $81 thousand for the six months ended June 30, 2012 and for the year ended December 31, 2011, respectively. The Chatom Assets’ remaining contractual lease obligations as of December 31, 2011 represents commitments through August 2014 along with asset retirement obligations are presented below (in thousands):

 	  	Payments for the year ended December 31,	 	
 	  	Total	 	  	2012	 	  	2013	 	  	2014	 	  	2015	 	  	2016	 	  	Thereafter	 	
Operating leases	  	$	170	  	  	 	64	  	  	 	64	  	  	 	42	  	  	 	—  	  	  	 	—  	  	  	 	—  	  	
Asset retirement obligations	  	 	396	  	  	 	—  	  	  	 	—  	  	  	 	—  	  	  	 	—  	  	  	 	—  	  	  	 	396	  	
	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
	  	$	566	  	  	 	64	  	  	 	64	  	  	 	42	  	  	 	—  	  	  	 	—  	  	  	 	396	  	
	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
9. SUBSEQUENT EVENTS
Acquisition of Chatom Assets by American Midstream Partners, LP
On July 9, 2012 the Partnership announced the closing of the acquisition of an 87.4% interest in the Chatom Assets from affiliates of Quantum, effective July 1, 2012. The acquisition consideration of approximately $51 million includes a credit associated with the cash flow Chatom Assets generated between January 1, 2012, and the acquisition closing date. The consideration paid by the Partnership consisted of cash, which was funded under borrowings under the Partnership’s revolving credit facility. The credit facility provides for a maximum borrowing equal to the lesser of (i) $200 million or (ii) 4.50 times adjusted consolidated EBITDA. The Partnership may elect to have loans under the credit facility bear interest either at a Eurodollar-based rate plus a margin ranging from 2.25% to 3.50% depending on our total leverage ratio then in effect, or a base rate which is a fluctuating rate per annum equal to the highest of (a) the Federal Funds Rate plus 1/2 of 1% (b) the rate of interest in effect for such day as publicly announced from time to time by Bank of America as its “prime rate”, and (c) the Eurodollar Rate plus 1.00% plus a margin ranging from 1.25% to 2.50% depending on the total leverage ratio then in effect. The Partnership also pays a commitment fee of 0.50% per annum on the undrawn portion of the revolving loan. For the six months ended June 30, 2012, the weighted average interest rate on borrowings under the Partnership’s credit facility was approximately 3.88%.
In connection with the Chatom Acquisition, the Partnership entered into two-year commodity price option and swap agreements with counterparties effective July 2012 through December 2013 to mitigate exposure to commodity price volatility that would otherwise be present as a result of the Partnership’s acquisition of the Chatom Assets. Specifically, the commodity price swap agreements fix the margin the Partnership will realize from the purchase of natural gas from third parties or the sale of residue gas or NGLs to third parties at the Chatom Assets. The Partnership will realize gains and losses on the commodity price swap agreements in the period in which the associated revenues are recognized. Below is a summary of the fixed prices on the Partnership’s commodity price swap agreements for the Chatom Assets.

 	  	Notional
(in gallons)	 	  	2012
Strike Prices	 	  	2013
Strike Prices	 	
Options	  				  				  				
Propane	  	 	748,000	  	  	$	 0.80-0.83	  	  	$	 0.83-0.87	  	
Iso butane	  	 	333,000	  	  	$	1.35-1.38	  	  	$	1.38-1.40	  	
Normal butane	  	 	180,000	  	  	$	1.26-1.29	  	  	$	1.29-1.31	  	
Swaps	  				  				  				
Natural gas (mmbtu)	  	 	392,000	  	  	$	3.09-3.15	  	  	$	3.58-3.84	  	
Natural gasoline	  	 	5,300,000	  	  	$	1.84-1.87	  	  	$	1.89-1.90	  	
 
11

Affiliated balances subsequent to acquisition
Prior to July 1, 2012, cash transactions attributable to the Chatom Assets were received or paid in cash by Quantum within its centralized cash management system. In connection with the Chatom Acquisition, affiliate receivable and payable balances, net with Quantum were settled through an adjustment to owners’ equity. Subsequent to July 1, 2012, the Partnership cash-settles transactions directly with third parties and Quantum, including transactions attributable to the Chatom Assets during the transition.
 
12

Exhibit 99.3
AMERICAN MIDSTREAM PARTNERS, LP
INDEX TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS

 	  	Page	 	
Introduction	  	 	2	  	
		
Unaudited pro forma condensed consolidated balance sheet as of June 30, 2012	  	 	4	  	
		
Unaudited pro forma condensed consolidated statement of income for the six months ended June 30, 2012	  	 	5	  	
		
Unaudited pro forma condensed consolidated statement of income for the year ended December 31, 2011	  	 	6	  	
		
Notes to unaudited pro forma condensed consolidated financial statements	  	 	7	  	
 
1

Introduction to the unaudited pro forma
condensed consolidated financial statements of American Midstream Partners, LP
The unaudited pro forma condensed consolidated financial statements present the impact on American Midstream Partners, LP’s (collectively with its consolidated subsidiaries, the “Partnership”) results of operations and financial position attributable to i) the acquisition of certain midstream assets from affiliates of Quantum Resource Management, LCC (“Quantum”) pursuant to the Purchase and Sale Agreement dated as of July 2, 2012 (the “Chatom PSA”) with an effective date for accounting purposes of July 1, 2012 and ii) the Partnership’s acquisition of a 50% undivided interest in the Burns Point Plant (“Burns Point”) from Marathon Oil Company (“Seller”) for total cash considerations of $35.5 million on December 1, 2011. No liabilities of the Seller were assumed. The purchase was effective on November 1, 2011 with the assumption of insurable risks, operating liabilities and entitlement to in-kind revenues as of that date. The remaining 50% undivided interest is owned by the unaffiliated operator.
Pursuant to the Chatom PSA Agreement, the Partnership acquired an 87.4% ownership interest in Chatom processing and fractionation plant and associated gathering infrastructure, collectively known as the “Chatom Assets” which are located in Washington County, Alabama, approximately 15 miles from the Partnership’s Bazor Ridge processing plant in Wayne County, Mississippi, and consists of a 25 MMcf/d refrigeration processing plant, a 1,900 Bbl/d fractionation unit, a 160 long-ton per day sulfur recovery unit, and a 29-mile gas gathering system. The consideration paid by the Partnership consisted of approximately $51 million in cash, which was funded under borrowings under the Partnership’s revolving credit facility. The credit facility provides for a maximum borrowing equal to the lesser of (i) $200 million or (ii) 4.50 times adjusted consolidated EBITDA. We may elect to have loans under the credit facility bear interest either at a Eurodollar-based rate plus a margin ranging from 2.25% to 3.50% depending on our total leverage ratio then in effect, or a base rate which is a fluctuating rate per annum equal to the highest of (a) the Federal Funds Rate plus 1/2 of 1% (b) the rate of interest in effect for such day as publicly announced from time to time by Bank of America as its “prime rate”, and (c) the Eurodollar Rate plus 1.00% plus a margin ranging from 1.25% to 2.50% depending on the total leverage ratio then in effect. The Partnership also pays a commitment fee of 0.50% per annum on the undrawn portion of the revolving loan. For the six months ended June 30, 2012, the weighted average interest rate on borrowings under the credit facility was approximately 3.88%.
The unaudited pro forma condensed consolidated income statements for the six months ended June 30, 2012 and for the year ended December 31, 2011 and unaudited pro forma condensed consolidated balance sheet as of June 30, 2012 are based upon the historical consolidated financial statements of the Partnership and the historical financial statements of the Chatom Assets. The historical financial statements of Burns Point are included in the historical consolidated balance sheet of the Partnership as of June 30, 2012, in the historical consolidated statements of income for the six months ended June 30, 2012 and included two months of activity in the historical consolidated statements of income for the year ended December 31, 2011.
The unaudited pro forma condensed consolidated balance sheet has been prepared as if the Chatom Assets were acquired on June 30, 2012. The unaudited pro forma condensed consolidated statements of income have been prepared as if the Chatom Assets and Burns Point were acquired on January 1, 2011, in the case of the unaudited pro forma condensed consolidated statement of income for the six months ended June 30, 2012, and January 1, 2011, in the case of the unaudited pro forma condensed consolidated statement of income for the year ended December 31, 2011. The unaudited pro forma condensed consolidated financial statements have been prepared based on the assumption that the Partnership will continue to be treated as a partnership for U.S. federal and state income tax purposes and therefore will not be subject to U.S. federal income taxes or state income taxes. The unaudited pro forma condensed consolidated financial statements have also been prepared based on certain pro forma adjustments, as described in Note 2 — Pro forma adjustments .
The following financial statements are qualified in their entirety by reference to and should be read in conjunction with such historical financial statements and related notes contained in those reports: (i) Chatom Assets’ historical financial statements set forth in Exhibit 99.2 of this Current Report on Form 8-K/A as of and for the six months ended June 30, 2012 (unaudited) and as of and for the year ended December 31, 2011; (ii) the Partnership’s unaudited historical consolidated financial statements set forth in its Quarterly Report on Form 10-Q as of and for the six months ended June 30, 2012, as filed with the Securities and Exchange Commission (“SEC”); and (iii) the Partnership’s audited historical consolidated financial statements as of and for the year ended December 31, 2011 as filed with the SEC.
The pro forma adjustments reflected in the pro forma condensed consolidated financial statements are based upon currently available information and certain assumptions and estimates; therefore, the actual effects of these transactions will differ from the pro forma adjustments. However, the Partnership’s management considers the applied estimates and assumptions to provide a reasonable basis for the presentation of the significant effects of certain transactions that are expected to have a continuing impact on the Partnership. In addition, the Partnership’s management considers the pro forma adjustments to be factually supportable and to appropriately represent the expected impact of items that are directly attributable to the acquisition of the Chatom Assets by the Partnership.
The pro forma adjustments included in the unaudited pro forma condensed consolidated financial statements reflect the Chatom Assets and Burns Point, including the following significant transactions:
Chatom Assets:
 
 	a)	The acquisition of the interest in the Chatom Assets by the Partnership with a preliminary fair value of approximately $51 million, including the payment of approximately $51 million of cash which was funded under borrowings under the Partnership’s revolving credit facility. The excess of cash consideration paid over historical net book value of the assets acquired and liabilities assumed is recorded as a decrease to partners’ capital.	
 
 	b)	The inclusion of interest expense on the Partnership’s approximately $51 million of borrowings under the Partnership’s revolving credit facility which bears a variable rate of 3.88% at June 30, 2012 to finance the Chatom Assets acquisition.	
 
2

 	c)	The elimination of transaction costs included in the historical financial statements of the Partnership which are directly related to the Chatom Assets acquisition.	
 
 	d)	The elimination of Funds held for escrow included in the historical financial statements of the Partnership which were settled upon closing of the acquisition of the Chatom Assets.	
 
 	e)	The inclusion of the estimated additional depreciation expense, calculated on a straight-line basis over useful lives of 10 to 40 years, associated with allocated purchase price of net assets acquired during the respective period.	
 
 	f)	To reflect the non-controlling interest holders’ proportionate share of the equity of the Chatom Assets and proportionate share of the earnings of 12.6%.	
Burns Point:
 
 	g)	The inclusion of in-kind revenues and allocated direct operating costs and administrative fees from the beginning of the period.	
 
 	h)	The inclusion of the estimated additional depreciation expense, calculated on a straight-line basis over useful lives of 40 years, associated with allocated purchase price of net assets acquired during the respective period.	
 
 	i)	The inclusion of interest expense and amortization of deferred debt issuance costs on the Partnership’s approximately $35 million of borrowings under the Partnership’s revolving credit facility which bears a variable rate of approximately 7.37% during the year ended December 31, 2011 to finance the Burns Point acquisition.	
The unaudited pro forma condensed consolidated financial statements are not necessarily indicative of the results that would have occurred if the Partnership had acquired the Chatom Assets and Burns Point on the dates indicated nor are they indicative of the future operating results of the Partnership.
 
3

AMERICAN MIDSTREAM PARTNERS, LP
PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
AS OF JUNE 30, 2012
(unaudited, in thousands except earnings per unit)

 	  	Partnership
Historical	 	  	Chatom
Assets
Historical	 	  	Chatom
Assets Pro
Forma
Adjustments	 	 	 	  	Partnership
Pro Forma	 	
Assets	  				  				  				 		  				
Current assets	  				  				  				 		  				
Cash and cash equivalents	  	$	1,038	  	  	$	—  	  	  	$	51,100	  	 	a	  	$	1,038	  	
	  				  				  	 	(51,100	) 	 	a	  				
Accounts receivable	  	 	1,273	  	  	 	—  	  	  	 	—  	  	 		  	 	1,273	  	
Unbilled revenue	  	 	14,089	  	  	 	4,440	  	  	 	—  	  	 		  	 	18,529	  	
Risk management assets	  	 	2,721	  	  	 	—  	  	  	 	—  	  	 		  	 	2,721	  	
Funds held in escrow	  	 	5,500	  	  	 	—  	  	  	 	(5,500	) 	 	d	  	 	—  	  	
Other current assets	  	 	3,196	  	  	 	—  	  	  	 	(868	) 	 	c	  	 	2,328	  	
	  	 	 	 	  	 	 	 	  	 	 	 	 		  	 	 	 	
Total current assets	  	 	27,817	  	  	 	4,440	  	  	 	(6,368	) 	 		  	 	25,889	  	
Property, plant and equipment, net	  	 	161,525	  	  	 	4,585	  	  	 	51,100	  	 	a	  	 	217,210	  	
Risk management assets - long term	  	 	594	  	  	 	—  	  	  	 	—  	  	 		  	 	594	  	
Other assets, net	  	 	4,448	  	  	 	—  	  	  	 	—  	  	 		  	 	4,448	  	
	  	 	 	 	  	 	 	 	  	 	 	 	 		  	 	 	 	
Total assets	  	$	194,384	  	  	$	9,025	  	  	$	44,732	  	 		  	$	248,141	  	
	  	 	 	 	  	 	 	 	  	 	 	 	 		  	 	 	 	
Liabilities and Partners’ Capital	  				  				  				 		  				
Current liabilities	  				  				  				 		  				
Accounts payable	  	$	743	  	  	$	182	  	  	$	—  	  	 		  	$	925	  	
Accrued gas purchases	  	 	9,451	  	  	 	3,450	  	  	 	—  	  	 		  	 	12,901	  	
Accrued expenses and other current liabilities	  	 	5,317	  	  	 	—  	  	  	 	—  	  	 		  	 	5,317	  	
	  	 	 	 	  	 	 	 	  	 	 	 	 		  	 	 	 	
Total current liabilities	  	 	15,511	  	  	 	3,632	  	  	 	—  	  	 		  	 	19,143	  	
Other liabilities	  	 	8,490	  	  	 	411	  	  	 	—  	  	 		  	 	8,901	  	
Long-term debt	  	 	72,260	  	  	 	—  	  	  	 	51,100	  	 	a	  	 	123,360	  	
	  	 	 	 	  	 	 	 	  	 	 	 	 		  	 	 	 	
Total liabilities	  	 	96,261	  	  	 	4,043	  	  	 	51,100	  	 		  	 	151,404	  	
	  	 	 	 	  	 	 	 	  	 	 	 	 		  	 	 	 	
Commitments and contingencies	  				  				  				 		  				
Partners’ capital	  				  				  				 		  				
General partner’s interest	  	 	1,360	  	  	 	—  	  	  	 	(40	) 	 	a	  	 	1,320	  	
Limited partners’ interest	  	 	96,331	  	  	 	—  	  	  	 	(1,974	) 	 	a	  	 	94,357	  	
Accumulated other comprehensive income	  	 	432	  	  	 	—  	  	  	 	—  	  	 		  	 	432	  	
Owners’ equity	  	 	—  	  	  	 	4,982	  	  	 	(4,982	) 	 	a	  	 	—  	  	
	  	 	 	 	  	 	 	 	  	 	 	 	 		  	 	 	 	
Total partners’ capital	  	 	98,123	  	  	 	4,982	  	  	 	(6,996	) 	 		  	 	96,109	  	
	  	 	 	 	  	 	 	 	  	 	 	 	 		  	 	 	 	
Non-controlling interest	  	 	—  	  	  	 	—  	  	  	 	628	  	 	f	  	 	628	  	
	  	 	 	 	  	 	 	 	  	 	 	 	 		  	 	 	 	
Total liabilities, partners’ capital and non-controlling interest	  	$	194,384	  	  	$	9,025	  	  	$	44,732	  	 		  	$	248,141	  	
	  	 	 	 	  	 	 	 	  	 	 	 	 		  	 	 	 	
See accompanying notes to unaudited pro forma condensed consolidated financial statements.
 
4

AMERICAN MIDSTREAM PARTNERS, LP
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF INCOME
SIX MONTHS ENDED JUNE 30, 2012
(unaudited, in thousands except earnings per unit)

 	  	Partnership
Historical	 	 	Chatom
Assets
Historical	 	  	Pro Forma
Adjustments	 	 	 	 	  	Partnership
Pro Forma	 	
Revenue	  	$	90,278	  	 	$	35,756	  	  	$	—  	  	 				  	$	126,034	  	
Unrealized gain (loss) on commodity derivatives	  	 	3,494	  	 	 	—  	  	  	 	—  	  	 				  	 	3,494	  	
	  	 	 	 	 	 	 	 	  	 	 	 	 				  	 	 	 	
Total revenue	  	 	93,772	  	 	 	35,756	  	  	 	—  	  	 				  	 	129,528	  	
	  	 	 	 	 	 	 	 	  	 	 	 	 				  	 	 	 	
Operating expenses: 	  				 				  				 				  				
Purchases of natural gas, NGLs and condensate	  	 	63,449	  	 	 	28,409	  	  	 	—  	  	 				  	 	91,858	  	
Direct operating expenses	  	 	6,767	  	 	 	2,734	  	  	 	—  	  	 				  	 	9,501	  	
Selling, general and administrative expenses	  	 	6,997	  	 	 	896	  	  	 	(150	) 	 	 	c	  	  	 	7,743	  	
Equity compensation expense	  	 	798	  	 	 	—  	  	  	 	—  	  	 				  	 	798	  	
Depreciation and accretion expense	  	 	10,283	  	 	 	254	  	  	 	506	  	 	 	e	  	  	 	11,043	  	
(Gain) loss on sale of assets, net	  	 	(122	) 	 	 	—  	  	  	 	—  	  	 				  	 	(122	) 	
	  	 	 	 	 	 	 	 	  	 	 	 	 				  	 	 	 	
Total operating expenses	  	 	88,172	  	 	 	32,293	  	  	 	356	  	 				  	 	120,821	  	
	  	 	 	 	 	 	 	 	  	 	 	 	 				  	 	 	 	
Operating income (loss)	  	 	5,600	  	 	 	3,463	  	  	 	(356	) 	 				  	 	8,707	  	
Other income (expenses): 	  				 				  				 				  				
Interest expense	  	 	(1,582	) 	 	 	—  	  	  	 	(992	) 	 	 	b	  	  	 	(2,574	) 	
	  	 	 	 	 	 	 	 	  	 	 	 	 				  	 	 	 	
Net income (loss)	  	$	4,018	  	 	$	3,463	  	  	$	(1,348	) 	 				  	$	6,133	  	
	  	 	 	 	 	 	 	 	  	 	 	 	 				  	 	 	 	
Net income (loss) attributable to non-controlling interests	  	$	—  	  	 	$	—  	  	  	$	436	  	 	 	f	  	  	$	436	  	
	  	 	 	 	 	 	 	 	  	 	 	 	 				  	 	 	 	
General partner’s interest in net income (loss)	  	$	80	  	 				  				 				  	$	114	  	
	  	 	 	 	 				  				 				  	 	 	 	
Limited partners’ interest in net income (loss)	  	$	3,938	  	 				  				 				  	$	5,583	  	
	  	 	 	 	 				  				 				  	 	 	 	
Limited partners’ net income (loss) per unit (basic)	  	$	0.43	  	 				  				 				  	$	0.61	  	
	  	 	 	 	 				  				 				  	 	 	 	
Weighted average number of units used in computation of limited partners’ net income (loss) per unit (basic)	  	 	9,100	  	 				  				 				  	 	9,100	  	
	  	 	 	 	 				  				 				  	 	 	 	
Limited partners’ net income (loss) per unit (diluted)	  	$	0.43	  	 				  				 				  	$	0.60	  	
	  	 	 	 	 				  				 				  	 	 	 	
Weighted average number of units used in computation of limited partners’ net income (loss) per unit (diluted)	  	 	9,263	  	 				  				 				  	 	9,263	  	
	  	 	 	 	 				  				 				  	 	 	 	
See accompanying notes to unaudited pro forma condensed consolidated financial statements.
 
5

AMERICAN MIDSTREAM PARTNERS, LP
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF INCOME
YEAR ENDED DECEMBER 31, 2011
(unaudited, in thousands)

 	  	Partnership
Historical	 	 	Chatom
Assets
Historical	 	  	Chatom
Assets Pro
Forma
Adjustments	 	 	 	  	Burns Point
Pro Forma
Adjustments	 	 	 	  	Partnership
Pro Forma	 	
Revenue	  	$	248,282	  	 	$	51,644	  	  	$	—  	  	 		  	$	5,165	  	 	g	  	 	305,091	  	
Realized gain (loss) on early termination of commodity derivatives	  	 	(2,998	) 	 	 	—  	  	  	 	—  	  	 		  	 	—  	  	 		  	 	(2,998	) 	
Unrealized gain (loss) on commodity derivatives	  	 	(541	) 	 	 	—  	  	  	 	—  	  	 		  	 	—  	  	 		  	 	(541	) 	
	  	 	 	 	 	 	 	 	  	 	 	 	 		  	 	 	 	 		  	 	 	 	
Total revenue	  	 	244,743	  	 	 	51,644	  	  	 	—  	  	 		  	 	5,165	  	 		  	 	301,552	  	
	  	 	 	 	 	 	 	 	  	 	 	 	 		  	 	 	 	 		  	 	 	 	
Operating expenses:	  				 				  				 		  				 		  				
Purchases of natural gas, NGLs and condensate	  	 	202,403	  	 	 	39,439	  	  	 	—  	  	 		  	 	—  	  	 		  	 	241,842	  	
Direct operating expenses	  	 	12,856	  	 	 	5,932	  	  	 	—  	  	 		  	 	1,290	  	 	g	  	 	20,078	  	
Selling, general and administrative expenses	  	 	13,294	  	 	 	1,487	  	  	 	—  	  	 		  	 	—  	  	 		  	 	14,781	  	
Transaction expenses	  	 	282	  	 	 	—  	  	  	 	—  	  	 		  	 	—  	  	 		  	 	282	  	
Equity compensation expense	  	 	3,357	  	 	 	—  	  	  	 	—  	  	 		  	 	—  	  	 		  	 	3,357	  	
Depreciation and accretion expense	  	 	20,705	  	 	 	472	  	  	 	1,044	  	 	e	  	 	751	  	 	h	  	 	22,972	  	
(Gain) loss on sale of assets, net	  	 	(964	) 	 	 	—  	  	  	 	—  	  	 		  	 	—  	  	 		  	 	(964	) 	
	  	 	 	 	 	 	 	 	  	 	 	 	 		  	 	 	 	 		  	 	 	 	
Total operating expenses	  	 	251,933	  	 	 	47,330	  	  	 	1,044	  	 		  	 	2,041	  	 		  	 	302,348	  	
	  	 	 	 	 	 	 	 	  	 	 	 	 		  	 	 	 	 		  	 	 	 	
Operating income (loss)	  	 	(7,190	) 	 	 	4,314	  	  	 	(1,044	) 	 		  	 	3,124	  	 		  	 	(796	) 	
Other income (expenses):	  				 				  				 		  				 		  				
Interest expense	  	 	(4,508	) 	 	 	—  	  	  	 	(1,983	) 	 	b	  	 	(2,602	) 	 	i	  	 	(9,093	) 	
	  	 	 	 	 	 	 	 	  	 	 	 	 		  	 	 	 	 		  	 	 	 	
Net income (loss)	  	$	(11,698	) 	 	$	4,314	  	  	$	(3,027	) 	 		  	$	522	  	 		  	$	(9,889	) 	
	  	 	 	 	 	 	 	 	  	 	 	 	 		  	 	 	 	 		  	 	 	 	
Net income (loss) attributable to non-controlling interests	  	$	—  	  	 	$	—  	  	  	$	544	  	 	f	  	$	—  	  	 		  	$	544	  	
	  	 	 	 	 	 	 	 	  	 	 	 	 		  	 	 	 	 		  	 	 	 	
General partner’s interest in net income (loss)	  	$	(233	) 	 				  				 		  				 		  	$	(209	) 	
	  	 	 	 	 				  				 		  				 		  	 	 	 	
Limited partners’ interest in net income (loss)	  	$	(11,465	) 	 				  				 		  				 		  	$	(10,224	) 	
	  	 	 	 	 				  				 		  				 		  	 	 	 	
Limited partners’ net income (loss) per unit (basic and dilutive)	  	$	(1.64	) 	 				  				 		  				 		  	$	(1.46	) 	
	  	 	 	 	 				  				 		  				 		  	 	 	 	
Weighted average number of units used in computation of limited partners’ net income (loss) per unit (basic)	  	 	6,997	  	 				  				 		  				 		  	 	6,997	  	
	  	 	 	 	 				  				 		  				 		  	 	 	 	
See accompanying notes to unaudited pro forma condensed consolidated financial statements.
 
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Notes to the unaudited pro forma condensed consolidated financial statements of
American Midstream Partners, LP
1. Basis of presentation
The unaudited pro forma condensed consolidated financial statements are based upon the historical consolidated financial statements of the Partnership, inclusive of Burns Point, and the historical financial statements of the Chatom Assets. The unaudited pro forma condensed consolidated financial statements present the impact of the acquisitions of the Chatom Assets and Burns Point, which are described in the introduction to the unaudited pro forma condensed consolidated financial statements, on the Partnership’s results of operations, and present the impact of the Chatom Assets on the unaudited pro forma condensed consolidated financial position.
2. Pro forma adjustments
The following adjustments for the Partnership have been prepared (i) as if the acquisition of the Chatom Assets and Burns Point occurred on January 1, 2011, in the case of the unaudited pro forma condensed consolidated statement of income for the year ended December 31, 2011, (ii) as if the acquisition of the Chatom Assets occurred on January 1, 2012, in the case of the unaudited pro forma condensed consolidated statement of income for the six months ended June 30, 2012, and (iii) as if the acquisition of the Chatom Assets occurred on June 30, 2012, in the case of the unaudited pro forma condensed consolidated balance sheet:
 
 	Chatom	Assets:	
 
 	a)	The acquisition of the interest in the Chatom Assets by the Partnership with a preliminary fair value of approximately $51 million, including the payment of approximately $51 million of cash which was funded under borrowings under the Partnership’s revolving credit facility. The excess of cash consideration paid over historical net book value of the assets acquired and liabilities assumed is recorded as a decrease to partners’ capital.	
 
 	b)	The inclusion of interest expense on the Partnership’s approximately $51 million of borrowings under the Partnership’s revolving credit facility which bears a variable rate of 3.88% at June 30, 2012 to finance the Chatom Assets acquisition.	
 
 	c)	The elimination of transaction costs included in the historical financial statements of the Partnership which are directly related to the Chatom Assets acquisition.	
 
 	d)	The elimination of Funds held for escrow included in the historical financial statements of the Partnership which were settled upon closing of the acquisition of the Chatom Assets.	
 
 	e)	The inclusion of the estimated additional depreciation expense, calculated on a straight-line basis over useful lives of 10 to 40 years, associated with allocated purchase price of net assets acquired during the respective period.	
 
 	f)	To reflect the non-controlling interest holders’ proportionate share of the equity of the Chatom Assets and proportionate share of the earnings of 12.6%.	
 
 	Burns	Point:	
 
 	g)	The inclusion of in-kind revenues and allocated direct operating costs and administrative fees from the beginning of the period.	
 
 	h)	The inclusion of the estimated additional depreciation expense, calculated on a straight-line basis over useful lives of 40 years, associated with allocated purchase price of net assets acquired during the respective period.	
 
 	i)	The inclusion of interest expense and amortization of deferred debt issuance costs on the Partnership’s approximately $35 million of borrowings under the Partnership’s revolving credit facility which bears a variable rate of approximately 7.37% during the year ended December 31, 2011 to finance the Burns Point acquisition.	
3. Pro forma net income (loss) per limited common and general partner unit
Net income (loss) is allocated to the general partner and the limited partners (common unit holders) in accordance with their respective ownership percentages, after giving effect to incentive distributions paid to the general partner. Basic and diluted net income (loss) per limited partner common unit is calculated by dividing limited partners’ interest in net income (loss) by the weighted average number of outstanding limited partner common units during the period.
Unvested share-based payment awards that contain non-forfeitable rights to distributions (whether paid or unpaid) are classified as participating securities and are included in our computation of basic and diluted net income per limited partner unit.
We compute earnings per unit using the two-class method. The two-class method requires that securities that meet the definition of a participating security be considered for inclusion in the computation of basic earnings per unit. Under the two-class method, earnings per unit is calculated as if all of the earnings for the period were distributed under the terms of our agreement, regardless of whether the general partner has discretion over the amount of distributions to be made in any particular period, whether those earnings would actually be distributed during a particular period from an economic or practical perspective, or whether the general partner has other legal or contractual limitations on its ability to pay distributions that would prevent it from distributing all of the earnings for a particular period.
The two-class method does not impact our overall net income or other financial results; however, in periods in which aggregate net income exceeds our aggregate distributions for such period, it will have the impact of reducing net income per limited partner unit. This result occurs as a larger portion of our aggregate earnings, as if distributed, is allocated to the incentive distribution rights of the general partner, even though we make distributions on the basis of available cash and not earnings. In periods in which our aggregate net income does not exceed our aggregate distributions for such period, the two-class method does not have any impact on our calculation of earnings per limited partner unit.
 
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